Here’s why families should be thinking about taxes this Family Day
While Family Day should be spent bonding with your relatives, it’s also a great time to look back at what’s changed at home this past year as it may have implications to your tax scenario.
Whether you’ve become a blended family, or even if not much has changed, you might be eligible for benefits like the Canada Child Benefit (CCB), or you might be able to combine your expenses or be eligible for pension splitting. Families, it’s time to take note of how the following might change how you file your taxes this year.
Benefits of the CCB.
The Canada Child Benefit replaced the Canada Child Tax Benefit in 2016.
The CCB can provide a maximum annual benefit of up to $6,765 per child under the age of 6 and up to $5,708 per child between 6-17 years of age. Families with less than $31,711 in net income can receive the maximum benefit. For families making more than that, it is gradually phased out.
Beginning in 2019, social assistance payments received by kinship care providers is excluded from net income for the purpose of calculating your CCB payments. This change is retroactive to 2010.
Click here to learn more about whether you quality for the CCB!
Combining expenses? Yes you can!
In a family, each spouse can claim their own charitable donations or all donations can be claimed by one spouse. The first $200 of donations is worth 15% while anything additional is worth 29% or 33% depending on your taxable income level. As a result, it is usually more beneficial for one spouse to make the claim.
Spouses can also combine medical expenses and have the lower-income spouse claim the total. Expenses over 3% of net income count towards a credit.
Click here to learn more about how your relationship status can change your tax scenario.
The supplemental parental sharing benefit will provide an additional five weeks of benefits when both parents agree to share parental leave, designed to provide greater flexibility to families. It took effect for children born or placed for adoption after March 17, 2019.
The Working While on Claim program has also been extended to maternity and sickness benefits so that mothers now have greater flexibility in planning their return to work, while keeping more of their EI benefits. This pilot program allows claimants to keep 50 cents of their EI benefits for every dollar they earn, up to a maximum of 90% of their EI benefits.
Click here to learn more about the new EI parental sharing benefit and its flexibility for parents.
Whether a nuclear or blended family, there are a few tax implications to keep in mind that may improve your overall tax situation this year. If you would like to speak with a tax expert on what families should consider when claiming credits or transferring them to a spouse, feel free to call H&R Block or visit a location near you, anytime.